Strategies:

The company General Motors (GM) which was started by William C. Durant in the year 1908 was formed by the coming together of 25 independent car companies. As a result, the company had faced tough competition from Henry Fords Ford Motor Car Company. To counter the Ford Motor Car Company, GMs CEO Alfred P. Sloan had to make strategic change. 1. Expansion of Product Lines: It all started with reorganizing GM in search of competitive advantage. The company was divided into 5 contained major self-contained operating divisions: Chevrolet, Pontiac, Oldsmobile, Buick and Cadillac. Each of these divisions performed independently with separate functions, had separate supports and produced cars that were targeted at specific socioeconomic customer. GM carefully priced these cars in order to tempt customers to purchase different brands of cars as they move up the economic ladder. Moreover, GM also included all kinds of models of vehicles, from car to full sized to full sized trucks and various forms of specialized vehicles such as vans and ambulance. Furthermore, GM became highly integrated. 2. Reducing Cost and Improving Efficiency: With the change in customer preference and the hike in global demand for gas car, GM faced setback in their revenues and their profits began to shrink. GM pursued several programs to reduce cost and improve quality and invested more than $100 billion to attain these noble causes. 3. Focus on Differentiation: GM also focused on differentiating their cars in order to enhance their competitive position in automobile industry. GM invested more than$50 billion to improve and update their technology. Moreover, automated factories and robots were built in order to raise quality and productivity. 4. A Quest for Japanese Techniques and the creation of Saturn In 1982, a new division was created in order to develop low cost but quality cars like the Japanese competitors. The new division Saturn was responsible for imitating the Japanese

techniques and produce same small cars at a cheap rate. Saturn cars were priced to compete with Honda Civic and Toyota Corolla. GM also tried to learn the Japanese technique in lean manufacturing by creating a joint venture with Toyota in 1983 called the New United Motor Manufacturing, Inc (NUMMI) to produce Chevrolet Novas in GMs Freemont, California plant. Late on in the year 2000, GM went on to build a manufacturing plant, worth $1 billion in Lansing, Michigan that had advanced flexible manufacturing technologies in order to raise quality nearer to its Japanese competitor. 5. Attempt to reduce Cost Structure With the rapid decline in GM share from 50% to 35% in 1992, GM cut down the workforce and also decreased the manufacturing plant in an attempt to cut down cost. Moreover, the number of model produced was also reduced from 85 to 65 in 1993. The number of vehicle making platform was also reduced from 14 to 8. Moreover, GM also learned the need to reduce the number of parts needed to produce a car in order to reduce value-chain cost and speed product development. GM also changed the way it managed relationship with suppliers, to find more cost-effective ways to manage its supply chain. Moreover to help suppliers reduce costs, GM imitated Toyota and implemented a Purchased Input Concept Optimization with Suppliers (PICOS) strategy. 6. Global Expansion and the Formation of Alliances GM extended its supply chain management globally and began to develop hundreds of alliances with overseas parts manufacturers to produce components that could be used in its cars assembled around the world. The next major development in supply chain management took place in 2000 when GM, Ford and Chrysler formed an organization called Covisint to coordinate their purchase of standardized car components through the internet. GM also formed joint ventures with Japanese companies Isuzu Motors and Suzuki. GM also established a strategic alliance with Honda. GM also decided to strengthen its presence in China and Eastern European Markets. GM had many more strategic alliances and also acquired many company like Saab, 20% of Fiat and Korean conglomerate Daewoo.

7. Structural Changes GM streamlined its operations, decentralized decision making and integrated its design and manufacturing operations. It consolidated its nine engine groups into five and combined all its car divisions engineering and manufacturing units to eliminate redundancy. GM goal was to achieve economies of scale through integrating and coordinating its functional activities in product development, engineering, manufacturing and marketing around the world. Promoting innovation also became a key element of GM strategy. GM also invested heavily in IT to help implement its new global structure to provide the integration necessary.